Perhaps no litigation has been more severely contested, or has presented more intricate and troublesome questions, than that which has arisen under the coupon legislation of Virginia. That legislation has been prolific of many cases, both in the state and federal courts, not a few of which finally came to this court. Hartman v. Greenhow, 102 U.S. 672; Antoni v. Same, 107 U.S. 769, 2 Sup. Ct. 91; Virginia Coupon Cases, 114 U.S. 269, 5 Sup. Ct. 903; Poindexter v. Greenhow, 114 U.S. 270, 5 Sup. Ct. 903, 962; Carter v. Same, 114 U.S. 322, 5 Sup. Ct. 928, 962; Moore v. Same, 114 U.S. 340, 5 Sup. Ct. 1020; Marye v. Parsons, 114 U.S. 325, 5 Sup. Ct. 932, 962; Barry v. Edmunds, 116 U.S. 550, 6 Sup. Ct. 501; Chaffin v. Taylor, 116 U.S. 571, 6 Sup. Ct. 518; Royall v. Virginia, 116 U.S. 572, 6 Sup. Ct. 510; Id., 121 U.S. 102, 7 Sup. Ct. 826; Sands v. Edmunds, 116 U.S. 585, 6 Sup. Ct. 516; Stewart v. Virginia, 117 U.S. 612, 6 Sup. Ct. 922; In re Ayers, 123 U.S. 443, 8 Sup. Ct. 164; McGahey v. Virginia, 135 U.S. 662, 685, 10 Sup. Ct. 972.
For the first time in the history of this litigation has any appellate court, either state or federal, distinctly ruled that the coupon provision of the act of 1871 was void. After the passage of the act of March 7, 1872, which in terms required all taxes to be paid in cash, the case of Antoni v. Wright came before the court of appeals of Virginia (22 Grat. 833), and on December 13, 1872, was decided. Elaborate opinions were filed, and the court held the act of 1871 valid, and the act of 1872 void, as violating the contract embraced in the coupon provision of the act of 1871. This decision was reaffirmed in Wise v. Rogers, 24 Grat. 169, decided December 17, 1873; Clark v. Tyler, 30 Grat. 135, decided April 4, 1878; and again in Williamson v. Massey, 33 Grat. 237, decided April 29, 1880. In Greenhow v. Vashon, 81 Va. 336, decided January 14, 1886, the act requiring school taxes to be paid in cash was sustained, and such taxes excepted from the coupon contract on the ground of a specific command in the state constitution in force at the time of the passage of the funding act. There was no direct decision that the coupon provision was entirely void, although the intimation was clear that such was the opinion of the judges then composing the court.
In this court the decisions have been uniform and positive in favor of the validity of the act of 1871. There has been no dissonance in the declarations from the first case (Hartman v. Greenhow, 102 U.S. 672, 679) decided at the October term, 1880, in which, referring to this act, the court said, by Mr. Justice Field: 'A contract was thus consummated between the state and the holders of the new bonds and the holders of the coupons, from the obligations of which she could not, without their consent, release herself by any subsequent legislation. She thus bound herself, not only to pay the bonds when they became due, but to receive the interest coupons from the bearer at and after their maturity, to their full amount, for any taxes or dues by him to the state. This receivability of the coupons for such taxes and dues was written on their face, and accompanied them into whatever hands they passed. It constituted their chief value, and was the main consideration offered to the holders of the old bonds to surrender them and accept new bonds for two-thirds of their amount,'-to McGahey v. Virginia, 135 U.S. 662, 668, 10 Sup. Ct. 972, 974, decided at the October term, 1889, in which Mr. Justice Bradley, delivering the unanimous opinion of the court, observed: 'We have no hesitation in saying that the act of 1871 was a valid act, and that it did and does constitute a contract between the state and the holders of the bonds issued under it, and that the holders of the coupons of said bonds, whether still attached thereto or separated therefrom, are entitled, by a solemn engagement of the state, to use them in payment of state taxes and public dues. This was determined in Hartman v. Greenhow, 102 U.S. 672, decided in January, 1881; in Antoni v. Same, 107 U.S. 769, 2 Sup. Ct. 91, decided in March, 1883; in the Virginia Coupon Cases, 114 U.S. 269, 5 Sup. Ct. 903, decided in April, 1885; and in all the cases on the subject that have come before this court for adjudication. This question, therefore, may be considered as foreclosed, and no longer open for consideration. It may be laid down as undoubted law that the lawful owner of any such coupons has the right to tender the same after maturity in absolute payment of all taxes, debts, dues, and demands due from him to the state.'
Since the decision of the court of appeals of Virginia in Antoni v. Wright, 22 Grat. 833, that the act of 1872, providing for the payment of taxes in cash only, was unconstitutional, the general assembly of Virginia has from time to time passed acts tending to embarrass the coupon holder in the exercise of the right granted by the funding act. Some of these acts appear in the statement preceding this opinion, but for a more full review of the legislation and the course of decision reference may be had to the opinion of Mr. Justice Bradley in the several cases reported under the title of McGahey v. Virginia, supra.
We are advised by the opinion of the court of appeals of Virginia in 22 Grat. 833, that the debt-two-thirds of which was proposed to be refunded, and most of which was, in fact, refunded amounted to $40,000,000 of principal. These refunding bonds, amounting to many millions of dollars, have passed into the markets of the world, and have so passed accredited, not merely by the action of the general assembly of the state of Virginia, but by the repeated decisions of her highest court, as well as of this court, for substantially a quarter of a century, to the effect that such coupon provision was constitutional and binding. Now, at the end of 27 years from the passage of the act, we are asked to hold that this guaranty of value, so fortified as it has been, was never of any validity, that the decisions to that effect are of no force, and that all the transactions which have been had based thereon rested upon nothing. Such a result is so startling that it at least compels more than ordinary consideration.
We pass, therefore, to a consideration of the specific questions presented in this record.
1. It is insisted that the decision of the court of appeals was right, and that the coupon provision was void. It were a waste of time to repeat all the arguments which have been heretofore presented, and we content ourselves with reiterating that which was said by Mr. Justice Bradley, speaking for the entire court, in McGahey v. Virginia, 135 U.S. 662, 668, 10 Sup. Ct. 972, 974: 'This question, therefore, may be considered as foreclosed, and no longer open for consideration. It may be laid down as undoubted law that the lawful owner of any such coupons has the right to tender the same, after maturity, in absolute payment of all taxes, debts, dues, and demands due from him to the state.'
2. It is insisted that, whatever may be our own opinions upon the case, we are to take the construction placed by the court of appeals of Virginia upon the act as the law of that state. While it is undoubtedly the general rule of this court to accept the construction placed by the courts of a state upon its statutes and constitution, yet one exception to this rule has always been recognized, and that in reference to the matter of contracts alleged to have been impaired. This was distinctly affirmed in Bank v. Skelly, 1 Black, 436, 443, in which the court, speaking by Mr. Justice Wayne, gave these reasons for the exception: 'It has never been denied, nor is it now, that the supreme court of the United States has an appellate power to revise the judgment of the supreme court of a state, whenever such a court shall adjudge that not to be a contract which has been alleged, in the forms of legal proceedings, by a litigant, to be one, within the meaning of that clause of the constitution of the United States which inhibits the states from passing any law impairing the obligation of contracts. Of what use would the appellate power be to the litigant who feels himself aggrieved by some particular state legislation, if this court could not decide, independently of all adjudication by the supreme court of a state, whether or not the phraseology of the instrument in controversy was expressive of a contract, and within the protection of the constitution of the United States, and that its obligation should be enforced, notwithstanding a contrary conclusion by the supreme court of a state? It never was intended, and cannot be sustained by any course of reasoning, that this court should, or could with fidelity to the constitution of the United States, follow the construction of the supreme court of a state in such a matter, when it entertained a different opinion.' The doctrine thus announced has been uniformly followed. Bridge Proprietors v. Hoboken Co., 1 Wall. 116, 145; Wright v. Nagle, 101 U.S. 791, 793; McGahey v. Virginia, 135 U.S. 665, 667, 10 Sup. Ct. 972, 974, in which, in reference to this very contract, it was said: 'In ordinary cases the decision of the highest court of a state with regard to the validity of one of its statutes would be binding upon this court; but where the question raised is whether a contract has or has not been made, the obligation of which is alleged to have been impaired by legislative action, it is the prerogative of this court, under the constitution of the United States and the acts of congress relating to writs of error to the judgments of state courts, to inquire and judge for itself with regard to the making of such contract, whatever may be the views or decisions of the state courts in relation thereto.' See, also, Douglas v. Kentucky, 168 U.S. 488, 501, 18 Sup. Ct. 199, and cases cited therein.
3. It is urged that our last decision-that in McGahey v. Virginia, supra-logically leads to the conclusion that the whole coupon contract was void, and that the court of appeals of Virginia rightly interpreted the scope of that decision when it so held. The argument of that court is that because the constitution of Virginia compels the payment of certain taxes in cash, and that, therefore, the coupon contract cannot be enforced as against those taxes, the whole contract must fail, the partial failure being a vice which enters into and destroys the entire contract. But the court overlooks that which was in fact decided in the eight cases reported under the title of McGahey v. Virginia, for while, in two of those cases, it was held that the coupon contract could not be enforced against certain specific taxes and dues, it was in others as distinctly held that it could be enforced in respect to general taxes.
It may be well to here quote the language with which Mr. Justice Bradley concludes his general review of the prior litigation, and which, in its last paragraph, shows that this very matter was considered and determined (pages 684, 685, 135 U.S., and page 980, 10 Sup. Ct.):
'Without committing ourselves to all that has been said, or even all that may have been adjudged, in the preceding cases that have come before the court on the subject, we think it clear that the following propositions have been established:
'First. That the provisions of the act of 1871 constitute a contract between the state of Virginia and the lawful holders of the bonds and coupons issued under and in pursuance of said statute.
'Second. That the various acts of the assembly of Virginia passed for the purpose of restraining the use of said coupons for the payment of taxes and other dues to the state, and imposing impediments and obstructions to that use, and to the proceedings instituted for establishing their genuineness, do in many respects materially impair the obligation of that contract, and cannot be held to be valid or binding in so far as they have that effect.
'Third. That no proceedings can be instituted by any holder of said bonds or coupons against the commonwealth of Virginia, either directly by suit against the commonwealth by name or indirectly against her executive officers to control them in the exercise of their official functions as agents of the state.
'Fourth. That any lawful holder of the tax-receivable coupons of the state issued under the act of 1871 or the subsequent act of 1879, who tenders such coupons in payment of taxes, debts, dues, and demands due from him to the state, and continues to hold himself ready to tender the same in payment thereof, is entitled to be free from molestation in person or goods on account of such taxes, debts, dues, or demands, and may vindicate such right in all lawful modes of redress,-by suit to recover his property, by suit against the officer to recover damages for taking it, by injunction to prevent such taking where it would be attended with irremediable injury, or by a defense to a suit brought against him for his taxes or the other claims standing against him. No conclusion short of this can be legitimately drawn from the series of decisions which we have above reviewed without wholly overruling that rendered in the Coupon Cases, and disregarding many of the rulings in other cases, which we should be very reluctant to do. To the extent here announced we feel bound to yield to the authority of the prior decisions of this court, whatever may have been the former views of any member of the court.
'There may be exceptional cases of taxes, debts, dues, and demands due to the state which cannot be brought within the operation of the rights secured to the holders of the bonds and coupons issued under the acts of 1871 and 1879. When such cases occur, they will have to be disposed of according to their own circumstances and conditions.'
Neither is the argument a sound one. It ignores the difference between the statute and the contract, and confuses the two entirely distinct matters of construction and validity. The statute precedes the contract. Its scope and meaning must be determined before any question will arise as to the validity of the contract which it authorizes. It is elementary law that every statute is to be read in the light of the constitution. However broad and general its language, it cannot be interpreted as extending beyond those matters which it was within the constitutional power of the legislature to reach. It is the same rule which obtains in the interpretation of any private contract between individuals. That, whatever may be its words, is always to be construed in the light of the statute, of the law then in force, of the circumstances and conditions of the parties. So, although general language was introduced into the statute of 1871, it is not to be read as reaching to matters in respect to which the legislature had no constitutional power, but only as to those matters within its control. And, if there were, as it seems there were, certain special taxes and dues, which, under the existing provisions of the state constitution, could not be affected by legislative action, the statute is to be read as though it in terms excluded them from its operation.
Indeed, the court of appeals does not follow what it calls the logic of the decision in McGahey v. Virginia to its necessary result. The scope of its argument is that, if a part of the consideration be illegal, the whole contract fails. But the promise on the part of the state, written into these coupons, and authorized by the act of 1871, was a promise to pay so much money, and to receive such promise in satisfaction of taxes. In reference to this, the court of appeals, in its opinion in this case, uses this language:
'We do not assail that act as unconstitutional as an entirety. We simply hold that the coupon feature of the act-the coupon contract, which is readily separable from the rest of the act-is repugnant to sections 7 and 8 of the constitution of Virginia, and is, therefore, an illegal contract. The validity of the bonds issued under and by authority of said acts of March 30, 1871, and March 28, 1879, is not denied; nor is it denied that the bondholders are entitled to the interest on the bonds, to be collected in the ordinary way; but we do deny that it can be collected through the medium of the illegal coupon, which has been most aptly designated the 'cut worm of the treasury." 90 Va. 597-606, 19 S. E. 114, 117.
Further, the authorities to which it refers make against the conclusion which it reaches. Thus, at the end of its argument, it quotes as a principal authority the following:
'The concurrent doctrine of the text-books on the law of contracts is that, if one of two considerations of a promise be void merely, the other will support the promise; but that, if one of two considerations be unlawful, the promise is void. When, however, for a legal consideration, a party undertakes to do one or more acts, and some of them are unlawful, the contract is good for so much as is lawful and void for the residue. Whenever the unlawful part of the contract can be separated from the rest, it will be rejected, and the remainder established. But this cannot be done when one of two or more considerations is unlawful, whether the promise be to do one lawful act, or two or more acts part of which are unlawful, because the whole consideration is the basis of the whole promise. The parts are inseparable. Widoe v. Webb, 20 Ohio St. 431, citing Metc. Cont. 246; Add. Cont. 905; Chit. Cont. 730; 1 Pars. Cont. 456; 1 Pars. Notes & B. 217; Story, Prom. Notes, § 190; Byles, Bills, 111; Chit. Bills, 94.
'And in the same case it is said: 'Whilst a partial want or failure of consideration avoids a bill or note only pro tanto, illegality in respect to a part of the consideration avoids it in toto. The reason of this distinction is said to be founded, partly at least, on grounds of public policy, and partly on the technical notion that the security is entire, and cannot be apportioned; and it has been said with much force that, where parties have woven a web of fraud or wrong, it is no part of the duty of courts of justice to unravel the threads, and separate the sound from the unsound;' citing Story, Prom. Notes, and Byles, Bills, supra, and then adds: 'And, in general, it makes no difference as to the effect whether the illegality be at common law or by statute."
This decision declares that, when the consideration is illegal, the promise fails; and to like effect are the other authorities cited. But in the case at bar there is no illegality in the consideration. That was furnished by the bondholder in the old bond, and that bond was the sole consideration. It is nowhere suggested that there was any vice or illegality in it; that it was not a valid obligation of the state. When the bondholder surrendered that, he furnished the entire consideration for the contract, and for that he received from the state a promise. And, as the supreme court of Ohio said in the case above cited: 'When, however, for a legal consideration, a party undertakes to do one or more acts, and some of them are unlawful, the contract is good for so much as is lawful and void for the residue.' The court of appeals concedes that the promise made by the state to pay the interest is valid, because made upon a good and lawful consideration. Does it not logically follow that the promise of the state is also good as to all other matters contained within it in respect to which it might lawfully make a promise? It promised to receive the coupons 'for all taxes, debts, dues, and demands due the state.' That promise was necessarily for each tax and debt as well as for all taxes and debts. If it should so happen that any single tax or debt cannot, under the constitution of the state, be lawfully discharged by the receipt of the coupon, there is no difficulty in separating that part of the contract from the balance. And, as said by the supreme court of Ohio: 'Whenever the unlawful part of the contract can be separated from the rest, it will be rejected, and the remainder established.'
To like effect are the decisions of this court. In U.S. v. Bradley, 10 Pet. 343, suit was brought on a paymaster's bond, and it was claimed that, as some of the stipulations were in excess of those required by the statute, and illegally inserted, the whole bond was void. But the court overruled the contention, saying (page 360):
'That bonds and other deeds may, in many cases, be good in part and void for the residue, where the residue is founded in illegality, but not malum in se, is a doctrine well founded in the common law, and has been recognized from a very early period. Thus in Pigot's Case, 11 Co. Litt. 27b, it was said that it was unanimously agreed in 14 Hen. VIII. 25, 26, that, if some of the covenants of an indenture, or of the conditions indorsed upon a bond, are against law, and some are good and lawful, that in this case the covenants or conditions which are against law are void abinitio, and the others stand good.'
So, in Gelpcke v. City of Dubuque, 1 Wall. 221, this court said, in reference to a similar contention in a suit on a contract made by the officials of the city of Dubuque (page 222):
'We have not, therefore, considered the questions which they present. They relate to certain provisions of the contract which are claimed to be invalid. Conceding this to be so, they are clearly separable and severable from the other parts which are relied upon. The rule in such cases, where there is no imputation of malum in se, is that the bad parts do not affect the good. The valid may be enforced.' We see no reason to change the views heretofore and often expressed by this court, and reiterate, as said in 135 U.S. 668, 10 Sup. Ct. 974: 'This question, therefore, must be considered as foreclosed, and no longer open for consideration.'
4. It is urged that this court has no jurisdiction of this case, for the reason that the court of appeals in its opinion does not consider the subsequent legislation passed by the state with the view of impairing the contract created by the act of 1871, but limits itself to a consideration of that act, and adjudges it void. In support of this proposition the rule laid down in New Orleans Waterworks Co. v. Louisiana Sugar Refining Co., 125 U.S. 18, 38, 8 Sup. Ct. 741, reaffirmed in Huntington v. Attrill, 146 U.S. 657, 684, 13 Sup. Ct. 224, and Bacon v. Texas, 163 U.S. 205, 216, 16 Sup. Ct. 1023, 1027, is cited.
In this last case the doctrine is summed up in the following statement:
'Where the federal question upon which the jurisdiction of this court is based grows out of an alleged impairment of the obligation of a contract, it is now definitely settled that the contract can only be impaired within the meaning of this clause in the constitution, and so as to give this court jurisdiction on writ of error to a state court by some subsequent statute of the state which has been upheld or effect given it by the state court. Water Co. v. Easton, 121 U.S. 388, 7 Sup. Ct. 916; New Orleans Waterworks Co. v. Louisiana Sugar Refining Co., 125 U.S. 18, 8 Sup. Ct. 741; Land Co. v. Laidley, 159 U.S. 103, 109, 16 Sup. Ct. 80. * * * If the judgment of the state court gives no effect to the subsequent law of the state, and the state court decides the case upon grounds independent of that law, a case is not made for review by this court upon any ground of the impairment of a contract. The above-cited cases announce this principle.'
It is true, the court of appeals in its opinion only incidentally refers to statutes passed subsequent to the act of 1871, and places its decision distinctly on the ground that that act was void in so far as it related to the coupon contract, but at the same time it is equally clear that the judgment did give effect to the subsequent statutes, and it has been repeatedly held by this court that in reviewing the judgment of the courts of a state we are not limited to a mere consideration of the language used in the opinion, but may examine and determine was is the real substance and effect of the decision.
Suppose, for illustration, a state legislature should pass an act exempting the property of a particular corporation from all taxation, and that a subsequent legislature should pass an act subjecting that corporation to the taxes imposed by the city in which its property was located, and that on the first presentation to the highest court of the state of the question of the validity of taxes levied under and by virtue of this last act that court should, in terms, hold these city taxes valid notwithstanding the general clause of exemption found in the prior statute. In that event no one would question that this court had jurisdiction to review such judgment, and inquire as to the scope of the contract of exemption created by the first statute. Suppose, further, that this court should hold that the first statute was valid and broad enough to exempt from all taxation, city as well as state, and adjudge the last act of the legislature void as in conflict with the prior, and that thereafter the city should again attempt to levy taxes upon the corporation, and that upon a challenge of those taxes the state court should say nothing in respect to the last act, but simply rule that the original act exempting the property of the corporation from taxation was void, could it fairly be held that this court was without jurisdiction to review that judgment,-a judgment which directly and necessarily operated to give force and effect to the last statute subjecting the property to city taxes? Could it be said that the silence of the state court in its opinion changed the scope and effect of the decision? In other words, can it be that the mere language in which the state court phrases its opinion takes from or adds to the jurisdiction of this court to review its judgment? Such a construction would always place it in the power of a state court to determine our jurisdiction. Such certainly has not been the understanding, and such certainly would seem to set at naught the purpose of the federal constitution to prevent a state from nullifying by its legislation a contract which it has made, or authorized to be made. In Hickie v. Starke, 1 Pet. 94-98, Chief Justice Marshall, delivering the opinion of the court, said:
'In the construction of that section [the twenty-fifth], the court has never required that the treaty or act of congress under which the party claims who brings the final judgment of a state court into review before this court should have been pleaded specially, or spread on the record. But it has always been deemed essential to the exercise of jurisdiction in such a case that the record should show a complete title under the treaty or act of congress, and that the judgment of the court is in violation of that treaty or act.'
And in Willson v. Marsh Co., 2 Pet. 245, 250, the same chief justice also said:
'But we think it impossible to doubt that the constitutionality of the act was the question, and the only question, which could have been discussed in the state court. That question must have been discussed and decided. * * * This court has repeatedly decided in favor of its jurisdiction in such a case. Martin v. Hunter's Lessee, 1 Wheat. 304, Miller v. Nichols, 4 Wheat. 311, and Williams v. Norris, 12 Wheat. 117, are expressly in point. They establish, as far as precedents can establish anything, that it is not necessary to state in terms on the record that the constitution or a law of the United States was drawn in question. It is sufficient to bring the case within the provisions of the twenty-fifth section of the judicial act if the record shows that the constitution or a law or a treaty of the United States must have been misconstrued, or the decision could not be made; or, as in this case, that the constitutionality of a state law was questioned, and the decision has been in favor of the party claiming under such law.'
In Satterlee v. Matthewson, 2 Pet. 380, 410, Mr. Justice Washington observed:
'* * * If it sufficiently appear from the record itself that the repugnancy of a statute of a state to the constitution of the United States was drawn into question, or that that question was applicable to the case, this court has jurisdiction of the cause under the section of the act referred to; although the record should not, in terms, state a misconstruction of the constitution of the United States, or that the repugnancy of the statute of the state to any part of that constitution was drawn into question.'
In Bridge Proprietors v. Hoboken Co., 1 Wall. 116, 143, an act passed by the state in 1860 was claimed to be in violation of a contract created by an act of 1790, and it was said:
'Now, although there are other decisions in which it is said that the point raised must appear on the record, and that the particular act of congress or part of the constitution supposed to be infringed by the state law ought to be pointed out, it has never been held that this should be done in express words. But the true and rational rule is that the court must be able to see clearly, from the whole record, that a certain provision of the constitution or act of congress was relied on by the party who brings the writ of error, and that the right thus claimed by him was denied. * * * It is said, however, that it is not the validity of the act of 1860 which is complained of by the plaintiffs, but the construction placed upon that act by the state court. If this construction is one which violates the plaintiffs' contract, and is the one on which the defendants are acting, it is clear that the plaintiffs have no relief except in this court, and that this court will not be discharging its duty to see that no state legislature shall pass a law impairing the obligation of a contract, unless it takes jurisdiction of such cases.'
There are also some cases involving alleged contract exemptions from taxation which are worthy of notice. In Given v. Wright, 117 U.S. 648, 655, 6 Sup. Ct. 907, the plaintiff in error claimed to hold real estate exempt from taxation by virtue of a contract alleged to have been contained in a law of the New Jersey colonial legislature passed August 12, 1758. The validity of this exemption had been sustained in New Jersey v. Wilson, 7 Cranch, 164, notwithstanding which, for about 60 years before the assessment in question was laid, taxes had been regularly assessed upon the land, and paid without objection. The highest court of New Jersey upheld the tax on the ground that the long acquiescence of the landowners raised a presumption that the exemption which had once existed had been surrendered. The jurisdiction of this court to review such judgment was sustained, the court saying:
'Where it is charged that the obligation of a contract has been impaired by a state law, as, in this case, by the general tax law of New Jersey as administered by the state authorities, and the state courts justify such impairment by the application of some general rule of law to the facts of the case, it is our duty to inquire whether the justification is well grounded. If it is not, the party is entitled to the benefit of the constitutional protection.'
In Railroad Co. v. Thomas, 132 U.S. 174, 184, 10 Sup. Ct. 68, 72, the plaintiff in error was given by its charter, which became a law on February 17, 1882, a certain exemption from taxation. In 1888 the legislature passed an act for the collection of taxes for past years, which, by its terms, was not applicable to railroad companies exempt by law or charter from taxation. The supreme court of the state held that the plaintiff was not entitled to the benefit of the exemption named in the acts of 1888. The jurisdiction of this court to review that judgment was challenged. But the court, by the chief justice, said:
'Although by the terms of the act of 1888 the taxes therein referred to were not to be levied as against a railroad exempt by law or charter, yet the supreme court held that this company is not exempt, and is embraced within the act; so that, if a contract of exemption is contained in the company's charter, then the obligation of that contract is impaired by the act of 1888, which must be considered, under the ruling of the supreme court, as intended to apply to the company. The result is the same, although the act of 1888 be regarded as simply putting in force revenue laws existing at the date of the company's charter, rather than itself imposing taxes, for, if the contract existed, those laws became inoperative, and would be reinstated by the act of 1888. The motion to dismiss the writ of error is therefore overruled.' In Railroad Co. v. Alsbrook, 146 U.S. 279, 293, 13 Sup. Ct. 72, 75, the state court, conceding the validity of a contract of exemption from taxation, held that certain property was not within its terms, and on this ground a motion to dismiss the writ of error was made by the defendant. In respect to that the chief justice said:
'The jurisdiction of this court is questioned upon the ground that the decision of the supreme court of North Carolina conceded the validity of the contract of exemption contained in the act of 1834, but denied that particular property was embraced by its terms; and that, therefore, such decision did not involve a federal question.
'In arriving at its conclusions, however, the state court gave effect to the revenue law of 1891, and held that the contract did not confer the right of exemption from its operation. If it did, its obligation was impaired by the subsequent law; and, as the inquiry whether it did or not was necessarily directly passed upon, we are of opinion that the writ of error was properly allowed.'
In Mobile & O. R. Co. v. Tennessee, 153 U.S. 486, 492, 493, 14 Sup. Ct. 968, 970, Mr. Justice Jackson, reviewing prior decisions, said:
'It is well settled that the decision of a state court holding that, as a matter of construction, a particular charter or a charter provision does not constitute a contract, is not binding on this court. The question of the existence or nonexistence of a contract, in cases like the present, is one which this court will determine for itself, the established rule being that where the judgment of the highest court of a state, by its terms or necessary operation, gives effect to some provisions of the state law which is claimed by the unsuccessful party to impair the contract set out and relied on, this court has jurisdiction to determine the question whether such a contract exists as claimed, and whether the state law complained of impairs its obligation.'
In the case before us, after the act of 1871 and in 1872, the general assembly passed an act requiring that all taxes should be paid in 'gold or silver coin, United States treasury notes, or notes of the national banks of the United States'; and again, in 1882, a further statute commanding tax collectors to receive in payment of taxes 'gold, silver, United States treasury notes, national bank currency, and nothing else.' This command was reenacted in the Code of 1887. Under these statutes the state demanded payment of its taxes in money, and repudiated its promise to receive coupons in lieu thereof. True, in its opinion, the court of appeals did not specifically refer to these statutes, but, by declaring that the contract provided for in the act of 1871 was void, it did give full force and effect to them, as well as to the general revenue law of the state. Now, it is one of the duties cast upon this court by the constitution and laws of the United States to inquire whether a state has passed any law impairing the obligation of a prior contract. No duty is more solemn and imperative than this, and it seems to us that we should be recreant to that duty if we should permit the form in which a state court expresses its conclusions to override the necessary effect of its decision.
It must also be borne in mind that this is not a case in which, after a statute asserted to be the foundation of a contract, acts are passed designed and tending to destroy or impair the alleged contract rights, and the first time the question is presented to the highest court of the state it takes no notice of the subsequent acts, but inquires simply as to the validity of the alleged contract. Here it appears that the state courts had repeatedly held the act claimed to create a contract valid, and had passed upon the validity of subsequent acts designed and calculated to destroy and impair the rights given by such contract, sustaining some and annulling others. Some of those judgments had been brought to this court, and by it the validity of the original act had been uniformly and repeatedly sustained, and the invalidity of subsequent and conflicting acts adjudged, and now, at the end of many years of litigation, with these subsequent statutes still standing on the statute books unrepealed by any legislative action, the state court, with only a casual reference to those later statutes, goes back to the original act, and, reversing its prior rulings, adjudges it void; thus in effect putting at naught the repeated decisions of this court as well as its own. Under such circumstances it seems to us that it would be a clear evasion of the duty cast upon us by the constitution of the United States to treat all this past litigation and prior decisions as mere nullities, and to consider the question as a matter de novo. It would be shutting our eyes to palpable facts to say that the court of appeals of Virginia has not, by this decision, given effect to these subsequent statutes.
Finally, it is urged that since the judgment in the trial court, and prior to the decision in the court of appeals, the general assembly of the state of Virginia passed an act (Acts Gen. Assem. 1893-94, p. 381) in terms repealing the statute authorizing this particular form of suit; that no state can be sued without its own consent; that such consent has thus been withdrawn, and therefore the whole proceeding abates, and this suit must be dismissed. It is true that such an act was passed, and that in Maury v. Com., 92 Va. 310, 23 S. E. 757, its validity was sustained by the court of appeals, but the judgment in this case did not go upon the effect of that repealing statute. It was not noticed in the opinion, and the decision was not that the suit abate by reason of the repeal of the statute authorizing it, but that the judgment of the trial court be reversed, and a new judgment be entered against the petitioner for costs. If the action had abated, it was error to render judgment against him for costs.
But there are more substantial reasons than this for not entertaining this motion. At the time the judgment was rendered in the circuit court of the city of Norfolk the act of 1882 was in force, and the judgment was rightfully entered under the authority of that act. The writ of error to the court of appeals of the state brought the validity of that judgment into review, and the question presented to that court was whether, at the time it was rendered, it was rightful or not. If rightful, the plaintiff therein had a vested right, which no state legislation could disturb. It is not within the power of a legislature to take away rights which have been once vested by a judgment. Legislation may act on subsequent proceedings, may abate actions pending, but when those actions have passed into judgment the power of the legislature to disturb the rights created thereby ceases. So, properly, the court of appeals, in considering the question of the validity of this judgment, took no notice of the subsequent repeal of the act under which the judgment was obtained, and the inquiry in this court is not what effect the repealing act of 1894 had upon proceedings initiated thereafter, or pending at that time, but whether such a repeal devested a plaintiff in a judgment of the rights acquired by that judgment. And in that respect we have no doubt that the rights acquired by the judgment under the act of 1882 were not disturbed by a subsequent repeal of the statute.
Even if the repeal had preceded the judgment in the trial court, or if, in a proceeding like this, equitable in its nature, the mere taking of the case to the court of appeals operated to vacate the decree, there would still remain a serious question. When the act of 1871 was passed, the coupon holder had a remedy by writ of mandamus to compel the acceptance of his coupons in payment of taxes. The form and mode of proceeding were prescribed by statute. Code Va. 1873, p. 1023. On January 14, 1882, the general assembly passed the act providing a new remedy for the coupon holder. This act came before this court in Antoni v. Greenhow, 107 U.S. 769, 774, 2 Sup. Ct. 91, 95, and was sustained, the court holding that while it is true that, 'as a general rule, laws applicable to the case, which are in force at the time and place of making a contract, enter into and form part of the contract itself, and 'that this embraces alike those laws which affect its validity, construction, discharge, and enforcement' (Walker v. Whitehead, 16 Wall. 314, 317); but it is equally well settled that changes in the forms of action and modes of proceeding do not amount to an impairment of the obligations of a contract if an adequate and efficacious remedy is left.' Upon this ground it was held that, the new remedy being adequate and efficacious, the taking away of the old right of proceeding by mandamus was valid, and the coupon holder must be content with the new remedy. Now, the statute creating this new remedy was, as we have seen, repealed by the act of 1894. That act does not, in terms, revive the former remedy. Indeed, the right to use the writ of mandamus in tax cases was specifically taken away, after the act of January 14, 1882, by the act of January 26, 1882. It was said, however, in the argument of counsel, that the former remedy was one arising under the common law, and that the settled law of Virginia is that, when an act is passed repealing an act creating a statutory remedy, it operates to revive the former common-law remedy. Insurance Co. v. Barley's Adm'r, 16 Grat. 363; Booth v. Com., Id. 519; and Mosely v. Brown, 76 Va. 419. If this be still the law of Virginia, and applicable to the case at bar, so that the repeal of the act of 1882 revives the former remedy by mandamus, then it is undoubtedly true that new suits can no longer be maintained under the act of 1882, and a party must proceed by mandamus. But that is a question yet to be settled by the court of appeals of Virginia. It is not decided in the case of Maury v. Com., and, so far as we have been advised, has not yet been determined by that court. If it shall finally be held by that court that the remedy by mandamus does not exist, then it will become a question for further consideration whether the act repealing the act of 1882 can be sustained. But it is not necessary now to determine that question, inasmuch as the judgment in the trial court was rendered, as we have seen, prior to the repealing act, and the right acquired by the judgment creditor was not, and could not constitutionally be, taken away.
The judgment of the court of appeals will be reversed, and the case remanded for further proceedings not inconsistent with this opinion.
Mr. Justice PECKHAM dissenting.
Notes edit
This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).
Public domainPublic domainfalsefalse